New stats show a rapid pay rise in some sectors.

Pay rises in private sector agreements have surged to their highest level in 15 years, with an average increase of 3.5 per cent, according to new data released by the Department of Workplace Relations and Employment. 

The rise comes as the Reserve Bank warns that rapidly increasing labour costs pose a risk of inflation and could prompt interest rate hikes. 

The data shows that 1075 new enterprise agreements were approved in the December quarter, covering more than 228,000 employees. 

While public sector pay rises remained flat at 2.3 per cent, private sector deals rose from their 2.9 per cent average increases in the previous quarters to 3.5 per cent.

Capital Economics economist Marcel Thieliant said the new agreement data “should be of some concern to the RBA”. 

“We estimate that around a quarter of all private sector employees have their pay determined by an EBA so the strength in pay hikes in private EBAs will put some upward pressure on overall wage growth,” he said. 

“And with union officials' inflation expectations still very high, pay hikes may continue to strengthen over the coming quarters.”

The rise in private sector wages comes as unions have been pursuing wage claims of up to 8 per cent, and maintenance workers at Tomago's Hunter Valley aluminium smelter rejected 6 per cent pay offers last week, paving the way for strikes. 

AMWU Newcastle organiser Brad Pidgeon says; “Industrial action is the last resort, but with cost-of-living pressures remaining high, our members are asking for a decent wage to help alleviate the pressures on them and their families”. 

While overall private sector deals still averaged increases of just 2.8 per cent, the new data suggests that collective bargaining will be putting more upward pressure on wages, according to NAB economist Taylor Nugent. 

He added that 3.5 per cent was in line with more recent snapshot data from the Fair Work Commission, which has started releasing average wage rises in approved agreements every fortnight.

The recent surge in private sector wages poses a risk of inflation and could lead to further interest rate hikes by the Reserve Bank. 

In announcing a surprise increase in the Reserve Bank's cash rate last week, Reserve Bank governor Philip Lowe warned that aggregate wages growth was still consistent with the inflation target, provided that the stalling in economy-wide productivity growth recovered.